2024’s Electricity Agreements: Maximizing Benefits from Bulk Energy Tenders amidst Escalating Energy Prices
2024 Energy Price Increases
Recently, energy prices have continued to rise sharply, both globally and in Australia. The ongoing effects of the COVID-19 pandemic and the war in Ukraine have worsened this trend. Additionally, local factors since May 2023, such as frequent generation outages and high commodity prices, have intensified the situation. It is crucial now more than ever to develop strategies to mitigate the impact of these increasing costs on common property energy agreements.
2024 Bulk Energy Tender
This year, we have continued on our journey to reduce our clients energy costs and sourced another bulk energy tender by grouping all of our smaller clients together to create a buying group. This approach has enabled us to compile the buying power of common property electricity and gas accounts for all of the schemes we manage and has allowed us to negotiate better individual deals for our schemes. Once again we have managed to negotiate a great overall savings for our clients energy costs by achieving a group pricing of just under 20% from Origins reference price.
2024 Bulk Energy Tender
This year we have again worked closely with our energy broker (Bulk Energy) to get the best deal for our schemes, given the current state of Australia’s Micro and Macro Economic Environments. Although we achieved a fantastic overall discount for this year’s tender, since 2021 these discounts have shrunk overall as a result of a variety of external factors which are driving demand and price increases for energy and gas costs nationwide. The following energy retailers were approached to quote via an request for pricing:
- AGL,
- Alinta,
- BlueNRG,
- Energy Australia,
- Origin,
- Powershop,
- Simply Energy, and
- Tango Energy.
Hew from Bulk Energy advises: “Energy prices have increased significantly since May 2022 due to unscheduled generation outages, poor renewables performance, adverse weather, and high underlying commodity costs. From 1 July 2023 the DMO (Default Market Offer) increased by about 30%. More recently, wholesale costs have decreased slightly, while retail and environmental costs have increased. Regarding Network costs, Ausgrid and Endeavour Energy have increased, while Essential Energy has decreased slightly. Across the entire Strata Life portfolio, we have achieved a cost reduction of 4.1% with Origin, a favourable outcome given the prevailing market.”
A 2024 Perspective on Strata Energy Tender: The Good, the Bad, and the Unpleasant
The Good
While a bulk tender can be advantageous, it presents challenges and requires months of detailed analysis. With energy prices fluctuating, partnering with a skilled and reliable energy broker is crucial. Careful research is essential to find a broker who delivers on their promises, especially in today’s volatile energy market.
The Bad
Setting up a bulk tender has its challenges and requires months of analysis. In these volatile times, partnering with a skilled energy broker can make a significant difference.
The Unpleasant Reality of Commissions
Unfortunately, many Strata Managers seek commissions on common property energy accounts, which can drive up your energy costs. At Strata Life, we choose not to accept any commission on your energy account. Additionally, we have secured a 25% reduction in the standard commission our energy broker receives from the retailer to help mitigate rising energy expenses.
The Impact and Results!
Our clients will experience significant benefits despite rising energy prices and the notable advantages we have managed to negotiate for each scheme, is a demonstration of our proactive approach to maximising savings in energy and gas costs for all our clients.
Benefits Highlight:
- Carbon-neutral electricity at no extra cost
- Flexible 24-month contracts with zero break fees
- Estimated total spend on the DMO was $805,006.00 (inc. GST).
- Estimated total spend with Origin, $648,621.00 (inc. GST).
- Difference/savings benefit from the DMO, $156,385.00 (inc. GST), or 19.42%.
Conclusion
In these challenging times, a strategically executed bulk energy tender can make a significant impact and as we move through 2024, partnering with knowledgeable and reliable brokers is crucial to outweigh the potential allure of commissions offered to your Strata Manager.
At Strata Life, we continue to spearhead efforts in fostering transparency and sustainability, ensuring significant savings amidst these unparalleled challenges.
About Strata Life – Strata Management Services
At Strata Life we strive to take the pressure of the day to day running of a strata scheme off of the shoulders of the committee members and owners. Whilst the nature of strata itself does mean that the owners/ committee are responsible for the decisions, the pressure is reduced by having a proactive manager provide guidance with a plain sense approach and quickly actioning issues as they arise.
We appreciate Committee members often have full time jobs and busy lives. Add to this that the strata scheme is often your home where Committee members do not want to have to police other residents.
Our aim is to minimise the work and time where we can, take on the role of reminding owners and residents of the by-laws so that everyone can peacefully enjoy community living.
Our team has extensive experience with properties on the North Shore, Hornsby and the Northern Beaches areas, with excellent local contractors and superior local knowledge.
Helpful links
- The Strata Life advantage »
- Our service level guarantee »
- Our strata managers »
- The history of Strata Life »
- Changing strata managers »
Get in touch
Whether you’re an existing client or not, our strata managers are here to help with all matters relating to strata schemes and community living. Our office is open Monday – Friday, 9 am – 5 pm to answer your call or, for after-hours assistance, please complete our online enquiry form and we’ll get back to you the following business day.
Telephone : 02 9456 9965
Email: contact@thestratalife.com.au
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Disclaimer: The information contained in this article is general information only and not legal advice. The currency, accuracy and completeness of this article (and its contents) should be checked by obtaining independent legal advice before you take any action or otherwise rely upon its contents in any way. Strata Life disclaims any liability for negligence or otherwise in any way connected with this article.